What does the 10c regional petrol tax mean for Auckland property owners?
The new Labour – NZ First – Greens coalition announced that it will be possible for Auckland council to impose a further levy on the cost of petrol and is said to be around 10c per litre.
This has been roundly welcomed by Auckland Council to help subsidise the massive infrastructure spend required. Infrastructure to enable Auckland to catch up to insufficient investment in the preceding decades.
The tax will naturally make the cost of commuting by private vehicle more expensive. This will force those at the fringes of affordability to strongly consider alternative means of transport, irrespective of whether their preferred mode of transport is by private vehicle.
Despite the lack of good quality public transport networks (which has to be said is improving), it must be looked at as a good thing for Auckland. It will help alleviate some of the congestion problems this city faces and encourage greater reliance on the public system.
So what impact is this going to have on property values?
As with all other major cities, it will further increase the attractiveness and therefore value of property the closer it is to good public transport links. The train network is rapidly improving through the electrification of trains, which improves reliability and greater frequency – and it’s better for the environment too.
The CRL is going to be a game changer. For example, it will cut the travel time in half from Mt Albert to the CBD from 40min to 20min - a total of 40min saved per day per person. That’s a massive productivity gain.
The allure of living closer to major links like train stations is going to create upward pressure on property values the closer they are to them. And reduced pressure on the roads with the improved convenience provided by the public networks.
As a developer, it makes sense for you to target these locations for greater yields and return, because that’s where the demand is going to be particularly strong.